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tv   Bloomberg Daybreak Europe  Bloomberg  June 6, 2017 1:00am-2:31am EDT

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>> may and jeremy corbyn clash pollrror as one new shows the conservatively narrowing to one percentage point. trump vows to calm a flare up in the gulf, but tensions continue to flare in the region. tim cook sayso the tech giant has helped u.k. officials investigate terror attacks. >> we have been cooperating with in not onlyernment
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-- not only in law enforcement kind of matters, but on some of the attacks. ♪ welcome to "bloomberg daybreak: europe," our flagship morning show in the city of london. i'm manus cranny in the studio. anna: i'm anna edwards, out in my sister. until the u.k. voters go to the polls. focus remainsthe on the aftermath of the terror attacks. diplomatically, we see the fallout of trump's tweets. that continues to be the focus. plenty to talk about, and the latest polling figures, but manus, we have to talk about the aftermath of the qatar-saudi cla sh.
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absolutely, we some money flow out of some of those equity markets. the question at 7:00 a.m. today, is will that continue? let's pick up on the narrowing in the lead in the polls? have you taken outlier risk position? you have slower services. what would a labour victory mean for the gilt market? this is a couple of different opinions regarding a minority government, led by labour, what that could do to the gilt market. as it managers sol -- asset managers solt gitllts and bought treasuries. you go all the way up to 1.7% on a minority on coalition, 1.4% to 1.5%. the conservatives maintaining a
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smaller majority, that would also be a bullish move for the gilt market, taking it down to 0.9%. this is something the market has to consider, albeit an outlier position. we have the risks rising with the ecb, qatar, and the election polls narrowing. definitelys are rising. you've also got the dollar-yen moving high. the dollar is down and the yen is higher. it is a dollar story more so than a yen story. today it is slightly a risk off story with the dollar hitting a six week low. a big psychological level for the market. the market is not want to be caught wrong bufooted. let's look at some of the reverse positions we have seen. oil went aggressively higher yesterday on the back of the saudi move against qatar,
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isolating qatar. but that comes back as the world understands its inventories rather than politics that will dominate at this agenda for the oil market. the aussi-dollar, the rate left unchanged. the lines were just not dovish enough for the aussie dollar. and their deficit, $3 billion . that is the state of play, anna on the markets. anna: that is the state of pla y. also, we will get kit juckes' take on how you price in the risks around the election. for the moment, let's get the bloomberg first word news with juliette saly. in australia, the islamic state has claimed responsibility for a hostage taking in melbourne that left three police officers injured. following a standoff at an apartment building, officers
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shot the 29-year-old after he came out and fired at police with a shotgun. he had taken a woman hostage that he had arranged to meet from an escort agency and is believed by police to have killed the building receptionist. said's chief executive has the company helped u.k. officials investigate terror attacks. tim cook's exclusive interview with bloomberg comes as we had a third terror attack in less than three months, putting more pressure on technology companies to prevent their products and services by being used by violent extremists. been cooperating with in u.k. government not only law enforcement kind of matters, attacks,me of the and i cannot speak in detail about that. but in cases where we have information and they have gone
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through the lawful process, we not just give it, but we do it very promptly. juliette: the u.s. said it will seek to defuse growing risks between qatar and its neighbors. sarah sanders says president donald trump wants to "de-escalate the process and is committed to holding talks with all parties." the saudis, and three regional allies, suspended flights to qatar, escalating a week old brawl. mayor held a vigil last night in solidarity with the terror attack in the city. thousands of people gathered at london bridge to honor the seven people killed and dozens of others and dozens of others injured. the event came as donald trump again took to twitter to again criticized the man, one of britain's most prominent muslims.
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global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. you can find more stories on the bloomberg at top . it has been a little bit of a risk off caution around the asian trend. the yen has pushed past 110 with the dollar since the end of april. australia of course, leaving the official cash rate on hold, down by 1.3% in late trade. hong kong stocks are holding at july 2015 highs. let's have a look at some of the stocks that are moving the momentum in the region at the moment and we do have noble group down by 6.25%. that is the lowest level since 2000. this is on the back of the increasing concern about the commodity trader. is downgraded to a sell and china evergrande, up by 6.8%, a
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record high here. developers continue to lift the hang seng. we could have a little bit of a property bubble coming through once again in hong kong. but these stocks continue to hit record highs. manus: juliette saly, thank you very much. in the u.k., the conservative party's lead has narrowed to one point from 17 points early in may. that is according to the latest poll from "good morning britain." anna is at westminster. you are wedged in for the long haul. this is the latest in the aftermath for the terror attacks on saturday night. give us the latest briefing. anna: we have the polls to deal with and the aftermath of the attacks. let's get to the polls. , coming down from a
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17 percentage point lead, down to just one percentage point. that is in line with some of the other polling we have seen. we have had this range of one to 12 percentage points. the other important thing to say about this poll is it was taken before the terror attacks on saturday. we will see if there is any more impact of that attack in the polling when we get some polling that comes after that. what will we see in the campaigning today? boris johnson is going to the northeast in england. he was a prominent lead in the campaign. he will go up there and say it is the moment to believe in the huge potential of brexit britain, taking that message to the part of the country that got the world's attention when it turned in some of the first wrong "leave" votes in june of last year. the aftermath of the attacks, very topical here. what did the police know and when? that is the focus domestically.
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internationally, focus has turned to diplomacy. the diplomatic probing coming from the united states via twitter from donald trump. apparently, he is not trying to pick a fight from the london mayor, but he's into be risking a diplomatic row. what will it take for you to criticize donald trump. doing end, he said he is a good job and it is wrong to say anything else. many politics to talk about, but we have to talk about the markets as well. manus: we do, and we have brought in our next guest, kit juckes. kit, thank you for coming in. anna has laid the groundwork in terms of the squeezing of the polls in the diplomatic spat. the pound priced for a hung parliament? that real risk that has
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manifested by the polls. kit: i think it is probably priced for a similar majority to the one we have already got so far. i think we have given up pricing the idea that theresa may wins herself a big majority. the consensus position is probably, this is a mess, but not a disaster. manus: anna, join in. anna: kit, i noticed you said the possibility of a labour led coalition that could trigger a much softer brexit is not being considered yet. on the one hand, the narrowing of the polls increases uncertainty. on the other hand, the narrowing in the polls perhaps suggests we get a different brexit outcome. out of the market deal with those conflicting messages -- how does the market deal with those conflicting messages? kit: i think uncertainty will rule.
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there is not much to make anybody enthusiastic about the gilt market in the very short term. the currency market started from the position where the pound has gone down a lot. you probably saw some of the shorts rebuild in the second half of last week. we don't have much data. and the real problem is, what we know is those are the parties that say, we are going to revisit this. the labour's position is, not quite brexit means brexit, but we are still going ahead with this. if you are not prepared to go back, trying to be part of the single market -- if you are not going to tell the british people, the bit about immigration, forget that, we are willing to trade immigration to be part of the single market because the economy needs it, if you don't go there, it is still a hard brexit. so, the question i would have in my mind for the market is, is it possible to imagine a labour led
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coalition of sorts, where someone says, throw away this insistence on controlling immigration. access to the single market is more important. if you don't do that, we are doing brexit, we are leaving and it is a hard brexit as we would have defined it a year ago. thes: where are we with say, it is aas you bit of a messy situation. another election, a leadership challenge, if you are in this awkward nightmare of minority government or a coalition of sorts. are talking tos you about that, and what impact would that have on the gilt market? i said this at the start of the show, a messy scenario could take it to 1.8% in terms of the gilt market. kit: in terms of the overall shape of the curve, all this
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uncertainty cannot be good for the economy. even more likely, particularly if the pound does not completely collapse, the interest rates stay on hold for even longer than you thought they would before while we look through the uncertainty. meanwhile, there is nothing in hat makes you think your preferred investing would be with the gilt market. manus: the risk of another election this year? for the next 12 months? kit: if you get an unworkable therity -- you seek conservatives try to run with a minority government for as long as they can. is that sustainable? can you get any two or three parties together in a workable government out of this particular polling? what happens with the conservative party leadership? for me, i would not rule a loss
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off the table. british shopping public, does the british economy, keep calm and carry on? what do you expect on the data front? kit: i don't think that will be the big problem in the sense that, it's alarming in terms of the british public shopping. we still see this fairly steady pick up in credit card debt, basically. the u.k. public, spectacular at shopping. concertsar going up to on sunday nights and things like that. u.k. the strength of the economy and psyche at this point. i don't expect that to change, but behind that, the economy is already slowing. debt levels are already worrying. the housing market is already rolling over. alreadynt is is looking is a more uncertain.
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the economic decline is already underway. the longer the u.k. consumer decides that the best way to solve the problem is to go and stand in line at the cash buy in, the longer you can delay the inevitable, but you cannot always delay it. manus: absolutely. kit juckes stays with the show. we are building up to the big day on thursday. westminster for the entire week, giving us the breadth of complexion of voices at westminster. we have live coverage of the > and right tv
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special coverage thursday night into friday morning. coming up on "bloomberg daybreak: europe," gulf flare up. that is the focus of our conversation next. qatar airline suspends flights to some of its neighbors. we break down the impact, next. this is bloomberg. ♪ 1:20 inin hong kong,
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the afternoon. the hang seng is up 1/3 of 1%. that is up 1/3 of 1%. kit juckes shrugs his shoulders, i'll take it let's talk about politics in the middle east. qatar airlines has suspended all of their flights to egypt and bahrain. saudi arabia and its allies cut ties to qatar by ending sea and
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air transport. joining us now is the executive editor for the middle east and africa. let's talk about the ramifications. we saw very clearly in the equity market yesterday, but what is the main impact physically on qatar? this is isolating qatar, is it? >> it is isolating qatar from its three immediate neighbors. there are a lot of impractical terms. the first impact has been on air travel, particularly qatar airlines, which has a lot of flights to bahrain, doha and saudi arabia. those flights are canceled. they already canceled flights yesterday. airspace ofat, the the countries that have taken those actions now have to be
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approved before they are allowed to fly to doha. of course, other airlines not flying over their airspace, i think there will be a lot of rerouting going on. anna: good morning to you. it is anna. what happens next year? i see the u.s. has been to some extent, trying to call for calm in the region. on the one hand, they publicly stood side-by-side with saudi arabia, but on the other hand, the fleet is based in qatar. what happens next in all of this? >> well, we don't know exactly, but the u.s. statement already indicates what happens, a concerted effort by the united states. but also we have seen efforts which has not joined in this campaign just
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yet. they called the qatar counterpart and asked them not to escalate the situation any further. we will see efforts, both regionally, and via the yet. they u.s. to try to mediate in this effort to try to resolve this as quickly as possible. yous: riad hamade, thank for the latest update on this middle east story. let's bring kit juckes from societe generale, global head of fx strategy. kit, the one thing that comes to mind immediately when you talk about the qatar story and the trump, trying to hand out the global all of branch, it is ironic. 10 days ago he was in saudi arabia, parading iran. through which a lot of this risk is rising. a lot of people are buying yen. is this the manifestation of risk off in the market? kit: i'm trying to work it out. it is partially risk off.
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if you look at that chart of dollar-yen, you have three defending peaks since late november and you have seen exactly the same thing in u.s. bond yields. yields line up painfully closely. is that risk aversion, or is this, to some degree, also just rethinking where interest rates are going? the lowest yielding currency in the world gets a hand, while everybody else is dragged down by the u.s. if this is risk aversion and nervousness coming through, too many events. the qatar story, people are not sure how this will play out. the u.s. economic story leaves people a little bit nervous after last week and then obviously, the u.k. election, adding to that uncertainty at the same time. i think it is natural the yen strengthens. the pattern, if you looked at last april, we took the 10 year u.s. yields down to about here.
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and when they stabilized, the dollar-yen moved back up. you look at that and think, that's what you would expect to happen. fictitiousu see the clouds breaking. anna: if you are thinking about things that might weigh in on that risk story, you mention a lot of factors. you have not mentioned to james comey testifying on capitol hill on thursday. is that something that will flare up in the market's eye? u.k. politics on thursday, so there will be a lot of air time to fill. kit: we have got the u.s. and the ecb as well. it could do. this probably will flare up. i don't know if the comey testimony changes things in the u.s., or keeps the story where
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it is with this uncertainty about u.s. political leadership overall. but the pattern this year has been, for longer than this year, for us to get nervous, for us to get a bit risk-averse, for the yen to strengthen and then for various and emerging-market currencies, the selloff. and then after it while, because we got steady global growth, really low interest rates, and a lot of investors need to earn a living, eventually money starts rolling back, looking for yield and you see the yen weaken and you see a range of emerging-market turns is strengthened. and then i go back to yesterday, back comes the mexican peso, rallying all day against its backdrop. there is part of me that says the overall tide of the need of this money to earn decent returns against this low rate background is very powerful. manus: the power of the zero
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bond. kit, thank you for joining anna and i this morning. that is kit juckes. next, we are live in paris. the ecb secretary-general for his first interview of the day. ♪
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at: welcome back. this is "bloomberg daybreak: europe." ands 630 in the morning 2:30 p.m. in tokyo. we will show you a live picture of tokyo this morning. the dollar-yen on the screen, cautious after a seven-week surge. guy johnson. guy: things will change a little bit. there is the negative bearish sentiment that has prevailed overnight. the moment according to the fair value calculation surrounding
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the ftse 100. we are expecting a flat open. that is what the bloomberg is kicking out this morning. maybe we will not see that negative sentiment creeping in. this was market reopens today as does the dax and a host of other markets around europe. you'll see a little bit of catch-up being exhibited when it comes to the story. the markets went down a lot yesterday. there's not a lot of catching up to do. let's move on and talk about the election. be in westminster a week. let's talk but where the currency markets and what they are expecting in terms of volatility. what we have is the cable rate. the white line is the one month and the blue line is the one week. that captures the election. we are expecting a pickup, that is expected to come back down so there is volatility being priced in. the markets are spooked by what we are seeing in terms of the latest polling numbers and that is priced in to the story. you can see on the risk
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reversals and when it comes to the volatility story. talking of which let's talk about some of the individual stock stories that are affected. this is a nice chart on your bloomberg this morning. basically what you have got here -- yougov the you got data. by 20theing stalked century fox and the chance of that deal fading as the tory lead starts to fade. that is an interesting stock story. we will see others as well. this story on the bloomberg talking about how the stock story will be affected by the election outcome. back over to you. manus: this is your addition of the hard copy of daybreak. you have an and i and a full hardcopy. what more could you want? check out the cover story. it is of course donald trump
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talking about markets. debating the mood there. the yield in the u.s. going lower overnight. and edging toward safety, all of this ahead of a variety of events that happened in the week ahead. you have the u.k. elections, the ecb, james comey, testifying in front of congress and they all fall on thursday. anna: another story we are focusing on on daybreak. you talked about it already and daybreak team- picked it up. trump wants to deescalate -- they want to deescalate the gulf after saudi arabia letter drive qatar.ate qatar can still access shipping routes. as well as those of. and in man.
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to theting listening diplomatic efforts to resolve this. let's hope they do. aboutreflecting yesterday the food sourcing and if they close the border where some of that is going to come from. enough of my personal anecdotes. >> we can never know enough about what level you -- of shopping you did. cansing on something that be a bit of an issue for the markets. plunged to the lowest in the most three decades. this was yesterday and the bonds , also done with the cost of senior bonds, jumping up to 720 basis points. that is amid conflicting reports of whether executives will go ,hrough with a planned meeting this with the ecb to discuss assistance. those are your daybreak stories. we are joined by caroline
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connan. morning i amd theed by angel gurria from oecd. we are seeing a new escalation of tensions in the middle east. we have -- the isolation of qatar and iran. are you worried about the geopolitical risks and this new destabilization of the region? angel: geopolitical risks are always worrisome because they have an impact on people's well-being, they have an impact on economic growth, they have an impact on investment flows, a have an impact on the creation of jobs, etc. they are the people involved to may be directly affected. there is also a sign that there is greater concern and less anybody who in
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gauges in, the support of terrorism. weoline: you would think could see further passions from the tension to global growth given the tensions in the region. isel: the global growth always affected by uncertainty and tension creates uncertainty. absolutely it has an effect and it is worrisome. caroline: donald trump once to deescalate the situation. did he help create it? angel: we'll want to de-escalate the situation. we will try to find a solution to something which is in the case of the middle east almost a secular problem or a secular challenge. but there are new problems, new manifestations, there is the question of isis. like there was the question of al qaeda before that. these are things that require action andllective
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cooperative action. caroline: the main theme of this is bridging divides. we had brexit and the election of donald trump, we had the run off of a presidential election in france. how can we went back the confidence of those who feel left out by globalization? onel: by delivering opportunities, delivering on the equality, inequality, we started documenting inequality since 12 years ago. and now, the evidence of inequality is -- has come back to haunt us and the response to inequality has to be inclusive growth. that means inclusive in terms of less inequality on the income but also on the cumulative wealth. and more important way
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on opportunities. ofoline: we are a couple days from the u.k. elections which was hit by another terrorist attack over the weekend in london. do you think these attacks -- this attack could have any impact on the outcome of the u.k. election? electors areitish going to express their collective wisdom in today's. it is their privilege and we will all be expecting what the outcome is. however, as a former londoner, and as the father and grandfather of six british nationality,l mexican and british. very stronglyl for what is going on. i feel it very much in my own skin. i walked all these places, i have been there 70 times.
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they'rehe british say going to keep calm and carry on. the resilience of the british people as well will be shown yet again. her line: the election is happening in the context of the brexit negotiations. are you feeling that brexit could damage the u.k. economy more than we previously expected? angel: when brexit was being discussed before the referendum, i said it was like the tax that would be imposed on the british people. the uncertainty is clear. we still are at the beginning stages, all of us would have preferred it did not happen but now it has. we have to make sure that it is seamless and that it happens as smoothly as possible. >> you will be more flexible in
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the negotiations. memberre supporting country, the u.k. and we are also helping the europeans clearly. we are very close, we have 25 at then members here oecd. it was born out of the marshall -- tohich was soon support the reconstruction of europe. we are heavily invested in europe and we are going to support the rest is to be as smooth and seamless as possible. caroline one month after the france was elected, how do you think he is going to manage to get the majority in parliament and what is your take on his first month in power? angel: we are very excited about emanuel macron's presidency. we have spoken to him, we have already started the process of working with him and with his
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ministers. we are going to continue that. it is ongoing since he was a minister. thee he promoted [inaudible] to help the vitality of the french economy. it was a continuum with him at the helm. it opens a new a promising chapter for the french economy. caroline: a new promising chapter. that is where we will end this. thank you very much, the secretary general of the oecd live from paris. apple let's talk about now. we spoke to the chief executive and he said the company helped u.k. officials investigate the terror attacks. interview exclusive comes as a third attack. prevent their products and
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services by using -- being used by extremists. apple systemhe new helped strengthen security. >> these attacks, our heart goes out to everyone affected by them. u.k.are grand est and the u.k.s, we have been in the pretty much the whole length of time for our company. like very -- they are a neighbor. we have thousands of employees there and so our heart goes out and so what do we do from a doneng with this, we have one thing since the beginning of the app stores, we curate the app store. and so we do not want hate speech on there. these kind of
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recruiting kinds of things on there. and so we have tried to be careful from the beginning about not having that stuff on there. i am not saying will never make a mistake. i do not know of the case were something has gone through in that perspective. whate very vigilant on happens from that point of view. we also, we have been cooperating with the u.k. in lawent not only enforcement kind of matters, but of the attack and i cannot speak in detail about that. in cases where we have information and have gone through the lawful process, we not just give it but we do it very promptly. and so i think, i would hope that they would say that we have
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been cooperating well. that some valuable -- there is valuable information. i think a misunderstanding about , encryption does not mean there is no information. exists.likely metadata and metadata if you are putting together a profile is very important. emily: can we assume encryption will make that stronger? >> the reality is the cyberattacks on people and governments, it is happening left and right everywhere. your safety, your security. it is not just privacy. it is not privacy versus security. it is privacy and security versus security. so we are always working to try to stay one step ahead of
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these hackers that, frankly speaking, have gone from the diet the basement that is a kind of hobbyist to a sophisticated it takes all that we can do to do it and we do not think our users should have to think through all these things. we try to stand up for users and stay one step ahead of these guys. cook speaking to bloomberg. we will be back as we continue to cap to the u.k. election. i will be here with the woman who took [inaudible] she is still on the campaign trail. we will find out the details. this is bloomberg. ♪
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anna: welcome back. you're looking at a live shot of berlin. 7:48 a.m. in berlin, 6:48 a.m. here in london. let's get a bloomberg business flash. here's juliette saly. retro wasaemilius a going ahead with the lance made with the european central bank. according to the spanish newspaper he and [inaudible] bank does not plan to request emergency liquidity assistance from the ecb as it not currently necessary. early merger talks between t-mobile and sprint indicated a all stock deal may be the option of putting the need for financing. parent companies door to telecom and softbank do not know if they and are talking to other potential partners. any potential merger would become kidded by the need for
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regulatory approval. complicated by the need for regulatory approval. new dearth ofng orders. the company is dropping rates. a decision will be made before the end of the year in the absence of sales. that is your bloomberg business flash. manus: thank you. let's talk about qatar. this is four arab nations pushing to isolate qatar from its ties with iran. yousef gamal el-din is here. what have you got for us to
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capture the moment? seems crises follow me wherever i go. we saw remarkable downward pressure on qatari stocks. to what extent -- what remains is how much government got involved and was it a representation of how equity investors feel question mark let me show you a chart. we have put it on the bloomberg. you are seeing that it has been relatively well. we have seen worse days on the qatar exchange. net inflow and outflow. outflow from foreign investors. this is as of yesterday. can see some of the foreign investors moved out. there has been worse. what is important to point out is that foreign investors were already selling in the lead up to the latest escalation. the tensions are up there, some
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of the other key asset classes where watching. the cost of credit default swaps, they have jumped the most mostme timber the qatar -- since september. they have been got back to life, that is the bets against the weakening currency. putting the qatar story and context for us. the conservative party lead at one percentage point. that was in early may and that is according to the latest poll. good and edwards has a guest that will be delighted to hear that. anna: i'm not sure. jinnah miller. theing us from sem, founding partner of sem and she is now with best for britain. she has had a very important
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role to play in the brexit story, taking the u.k. government to court. that was the old story i guess. that is taking to the u.k. to the supreme court and winning that battle. we find ourselves in different territory. what are your thoughts on the latest polling, what does that mean to you? gina: what i can say is the trend is right because of the new campaign and people are concerned about the lack of detail as we go toward brexit. also the u-turns the government has made. they are thinking do we want to risk a conservative government so the trend is right. we will have to wait and see. anna: that is your expectation. you have been out campaigning. guessing those politicians you think will give us the softest whatt into power, is that it is?
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gina: two things, those for individual local mps forget the central tribalism. their who will vote for conscience and put the country before their political party loyalty and then the vote against this extreme brexit story well unfreeze vote by the end of the negotiated time. including remaining, that is what is best for britain. anna: if you look at the polling for liberal democrats and it has not been stellar, they have not had many seats before and the polls suggest they are doing less than 10% and some six or 7%. does that suggest people do not care as much about the brexit vote as maybe people you have been circling with an mixing with? gina: i am fighting on the doorstep there is an exhaustion around election referendums voting again. one of the reasons they're not doing as well as they should be is that they are pushing the second referendum which i do not
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agree with. 's idea, not another vote in two years. that is why they are not [inaudible] anna: do you have a taste of politics, where does this take you in the future? ofa: you have to give 100% your time. i have a business and other campaigns and corruption in the city. i need to finish those first. not never but not now. now whetherciding you will or will not have a feature. you cannot step away entirely, can you? gina: i cannot. when you see something going wrong you either do something or nothing. i have always been the kind of first he does something. are they going to overstep the theirhen it comes to legal requirements and legislation but i will also be thinking in the future, what is best for our country, where do we go? anna: if we do the labor party
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doing better and that is what the polls are suggesting, how would you respond to that as someone who was in favor of remain. how do you rate them on their remain cometary or their softer brexit stance at the moment? gina: i believe investors are and negotiations seem to be dry from the best experience people from all parties as we go forward. this has got to be a realistic brexit more than anything. clean, weter hard or have to be realistic about what we are going to change. anna: thank you, gina miller from sem. with us here in westminster. lots more to come from here. manus: not now but not never. in terms of political career in the future. coming up on the show, tensions rise in the gulf as qatar
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airland suspended flights with their neighbors. we discussed the implications and the qatar investment authority. and some of their global positions in the world. this is bloomberg. ♪
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manus: one new poll conducted before saturday's attack shows the conservative lead narrowing to a point. to riseions continued in the regions as qatar airlines suspends flights pensions to egypt, bahrain, and the uae. tim cook says the text giant has helped u.k. officials investigate terror attacks. tim: we have been cooperating with the u.k. government in not only in law enforcement kind of
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matters, it on some of the attack. -- but on some of the attack. tous: you're welcome "bloomberg daybreak: europe." i am manus cranny in the studio. showsthe polling narrowing as you mentioned in the headlines. some of those pulling overnight suggest a one percentage point between the conservatives and labor. we will keep an eye on those polls and update you on the latest of o-matic spat between trump and the mayor of london. took to twitter late yesterday. we will bring you up-to-date with the latest on the aftermath of the attacks as well. let's talk about on the green but on the market, they risk off
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session overnight. those polls are 1/8 of 1%.that is up equity futures are lower, 7511 .2 on thee and down paris market. we have dollar-yen on the move and asian equities coming off the first decline in four days. let's have a look at the risk radar. the first decline in almost four days down by 1/8 of 1%. this is the yen strengthening dollar falling. the dollars off. it was a dollar fading, the dollar move story. the greenback is weaker against all currencies hitting a six-week low on the dollar-yen. that is the psychological breakpoint. the risks are rising throughout the week. you have comey testifying, the ecb and the election at westminster and the diplomatic spat in the middle east between
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qatar, saudi arabia, and other nations. let's have a look at some of the other commodities and the aussie dollar. you have oil extend its and inventories will be the focus. the oil supply disruption story does not really hold that hard thehe overnight writing of various people in the oil market. opec will survive any disruption area beside -- survived many before. there was not enough dovish commentary coming from the rba left rates unchanged. that is your risk radar. let's get across to juliette saly. she has got your first word news. juliette: thank you. islamic state in australia has claimed responsibility for a hostagetaking in melbourne. at aning a standoff apartment building, officers shot a 29 euros after he came out and fired at police with a
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shotgun. he had taken a woman hostage that he had arranged to meet from an escort agency and is believed by police to have killed the receptionist. officialsg u.k. investigate terror attacks. the interview comes as a third terror attack in less than three months have put more pressure on technology companies to prevent their products and services from being used by violent extremists. >> we have been cooperating with the u.k. government in not only in law enforcement kind of some of the on attack and i cannot speak in detail about that. that in cases where we have information and they have gone through the lawful process, we not just give it that we do it very promptly.
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london's mayor led a vigil in solidarity with the victims of saturday nights terror attack in the city. thousands people gathered near and in to honor the seven people deal -- killed and dozens injured. the event came as donald trump took to twitter to criticize mr. khan, one of britain's most prominent muslims. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . the marketsin on here in asia particularly as we see japan and astoria close-out and it has been once again one of caution trade. you saw the yen pushed through 110 to the dollar weighing on the nikkei. below that 20,000 point level australia is asx 200 coming under pressure. we have the rba leading the cash rate on hold but what i've see sx is the route in energy players on the back of that we
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saw in the debbie ti crude price. it is at the highest levels since jeni 2015. let's have a look at the stocks that have been moving in the region. group falling significantly, a lot of concern about its ability to repay its debt falling by 4.7%. the lowest levels since august 2000. and falling to the lows we have not seen since july 2014. ubs downgrading the stock to a sell. on the upside i mentioned developers in hong kong, continuing to hit another record high. we did have andrew harris on bloomberg radio saying that the property crash could be coming and this is an interesting shot. china'sseeing that bounds are gaining in tandem with the fixed income market old white. worldwide.
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chinese bonds are struggling to catch up after being left out of this year's bond rally and we are seeing an increase in chinese yields attracting buyers. very interesting that correlation there. manus: let's return to one of our lead stories around qatar and qatar airways. the move comes after saudi arabia and its allies cut ties air and seablocking transport and also closing the tiny island nation's only land border. this was yesterday. good to see you this morning. the main impact especially on qatar, this is physical as well as such a logical -- psychological, is that? absolutely. the physical impact is being seen with flights from the immediate neighboring countries being suspended and canceled.
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with the flights by qatar airways over saudi territory, in particular being blocked so you're going to see a lot of flights being rerouted. and i think psychologically for -- living in doha it must be disconcerting to know that these regular routes, these common routes, frequent flights are being cut off for them right now. i suspect there is a lot of rerouting done, also shipping constructionod and materials that would cross the saudi border which is now blocked. it is a busy time for those worried about supplies to qatar. anna: good morning. people are thinking about what fruit to their food takes and that construction takes. as across the border that way, for example. let me ask you what happens next. it seems to be an anchor bully
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difficult situation for people to judge how it moves from here. diplomatic resolution, is that being worked towards? that they arerd making efforts to work toward a resolution of this. we know that the kuwaitis have talked to the qatar emir asking him not to escalate the situation. and we also know that the turkish president talked to the saudi king. international and regional efforts to try and get the two sides talking and to resolve it. it is true to say that there seems to be absolute positions on this where saudi arabia and the uae are leading this effort basically demanding that qatar toes the line and sticks to the agreements reached between them. you very much.
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our managing editor from dubai. ,et's welcome louise kernohan asset manager at aberdeen investment. this is one chart that brings it into focus. thetility, cboe vol is lowest but the vix is up for the fourth week. the markets are getting edgy. as if it isst feels a bit of a crescendo in near-term risk. louise: it has been building up for a while. if you have -- looked at how the market has been performing at has been phenomenally resilient based on underlying data but everybody knows that there are these headlines reveling in the background, some of which we knew have been coming. the elections have come by relatively smoothly and now things that people were not expecting quite so much which are causing these sharp swings in volatility.
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anna: we have seen quite some swings in volatility. global equity markets not very far from recent highs despite all these risk factors we talk about daily. how vulnerable do u.s. stocks look to you? louise: with the u.s., the fundamentals are strong but then i think they are further ahead in the bull market than other developed markets in particular. i would be more wary. equities have been strong largely due to multiple expansion and so i think they do remain vulnerable if the fundamentals do not catch up. manus: one name that caught our eye in infrastructure, something --t donald trump has gone began to bank the drum on. if we look at infrastructure, the russell index, they are shorting the russell which is the broader index. myopicou have to be more
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through the trump rhetoric. infrastructure, how do you guys look at infrastructure, is that something that is slightly more real in terms of deliverability? louise: yeah. through the trump infrastructure, it comes down to a lot of what has been the strength on this expectation as it is coming through. there is a lot of belated demand for infrastructure. it is a timing issue as to when that will come through. that leave thes fed, there's a timing issue on when that comes through, a timing issue on when so many of the trump administration's policies will be delivered so where does that leave the fed, just one hike in june and then another in december or maybe not louise: if this year? would expect the fed to go through with the hikes that were expecting -- we were expecting for the rest of the year. so that is to more. it is what happens beyond that and the tone of the messaging they gave where it was going to
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be where the variability lies. i would suspect they are going to err on the side of caution. dennis: the fed obviously has gone into [inaudible] i want to circle back to some of the concepts. let's just have a look at some of the major positions that qatar holds, volkswagen, glencore, we are looking at the 10% of rosneft. maybe 17% of volkswagen. you did a great deal with some big clients down there in the middle east so i am interested be -- willker tarp qatar find it hard to do major deals? this is a dimension to the middle east from the saudi's. does it wrinkle, have you been chatting about it, what were you chatting about in terms of sovereign wealth funds and the biggest, one of the biggest in
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the world and the ability to do the deals. louise: yesterday the investment community i would say by surprise, this is nothing they saw coming. qatar is an externally wealthy place. and large states in the u.k. companies. glencore, or klees. they are big it also manageable. i would say. rattle investors little bit in the short term. i think investors are more focused on the fundamentals. manus: ok. those are the big holdings for the qatar investment authority. all very manageable, that is the line from aberdeen asset management, focus on the fundamentals. will stay with the show. talk about theo apple story.
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tim cook has been speaking to bloomberg. coming up an exclusive. more from our interview with tim cook coming up next. this is bloomberg. ♪
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manus: it has gone 8:18 a.m. in the morning in berlin. a shot of the brandenburg gate. the position in the market is aggressively long view. great expectations as we held from the european central bank and what kind of offers we may get. trump plans to quit the paris agreement on climate change, many of the america -- of america's topics it gives spoke out against the decision. we asked what that will mean for his relationship with donald
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trump. tim: i think you did listen to me. he did not aside what i wanted him to decide. i think he decided wrong. , not init is not good the best interest of the united states what he decided. of the way that i look at this thing, do you interact with politicians or do you not? my view is that first and foremost, things are about can you help your country and if you can help your country, and you do that by interacting, then you do it. that country eclipses politics. emily: you have people that are leaving the table like elon musk trade is the president jeopardizing his relationship with one of his key constituencies, the business community? tim: i think there is, i would differentiate and i am not
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speaking for those guys obviously but i would differentiate leaving a council and advising in a way that you think can help our country. one is ank the first judgment call that people make. i did not join a council. and so it is not a decision i had to make. i understand both sides of that. but advising on something that you believe will help america, i think is a requirement. as a ceo. you definitely do that. go pitchthe chance to the paris agreement again i am going to do it again. i think it is very important that we engage to fight climate change on a global basis. this is not something where you can solve it country by country.
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it requires a global action. a mission -- emissions created in one country affect another. so something we feel strongly about. i wanted to do every single to tellat we could do how important it was to stay in the agreement. unfortunately, he decided something different areas emily: why didn't you join the council? two why deny question mark reasons. my job is being the ceo of the company. i spend the bulk of my waking hours doing that. willingly because i left the company and the people in it. and so traveling rockies does not something that i look forward to doing except when i need to do. secondly, i do not find these
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councils and general committees to be terribly productive. about him wanting to advise on something where i help herhat we could we had a point of view that should be heard. and so i am doing the latter. i cannot imagine a situation where i would not because it is in the best interests of america to do it. i am first and foremost an american. manus: tim cook, first and foremost an american talking to emily with -- emily chang about security. the trump advisory team and his thoughts about that. and the lead narrowing to one point at the start of june from as much as 17 points earlier in may according to the latest poll for itv's good morning britain. we have been going through the past hour. the latest on the aftermath of
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the attacks on saturday night. what is the latest news briefing? latest is that domestic news is around what did the police now and when and the security story is not going anywhere. as we run toward thursday and the general election, the mayor of london asset the u.k. capital could lose up to 12,800 offices if the conservative party carried through their plan. theresa mayaid -- said she might reverse cuts to policing that were conducted while she was at the home office but said it is not just about staffing numbers, there are other factors. and plenty to talk about. donald trump with the tweets he has been making and placing against the mayor of london, that is of interest differ radically. could this lead to a diplomatic spat question mark and the poll numbers are interesting. we have seen this latest poll, a
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one percentage gap between labor and tories but this was taken before the saturday night attack. we have to bear that in mind. what will we see in more contemporary polling, more up-to-date polling for that will be of interest. boris johnson is on the road. he goes to the northeast of england with the message this is the hugeto believe in potential of brexit britain. manus: that is one line as we go towards this countdown to the election. the huge is in the studioe kernohan from aberdeen investment. the session highs up .251%. 1%.25 of
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louise: the worst-case scenario would be the biggest surprise which would be an outright labor when he had we would see some dramatic -- labour win. we would see some dramatic moves on the day. i would say whatever happens is we will see a move because we have gone from market pricing and fairly certain outcomes to uncertain outcomes. we will see a movement either way. anna: where does this leave the data story in the u.k., how do you rate the data story and how much are you fixated by that at the moment? louise: we are relatively cautious i would say on the data in the u.k. and it has been remarkably resilient for the last year. do think it is susceptible to weakening from a number of different areas. we have to i guess look through
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thursday and think what happens be on that area and ultimately, there's going to be a lot of change for all companies based in the u.k. it is that companies that can handle the change the best that are going to be the one that prosper. manus: let's talk about companies quickly. this is the personification of rocket risk area this is the for 27 --sky's bid 20th century fox. personification of risk for u.k. stocks? louise: this is a perfect example of a company reacting to what we have been hearing from sky. you have the m&a situation, cap or activity has been higher recently, that is something that potentially is at risk and also sky being an industry, you have regulation and all sorts of
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business names going on. the personification of political risk in the form of b-sky-b. you can markets -- the u.k. markets are open next. full coverage. thank you. ♪
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which is why comcast business delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. ♪ guy: good morning. you're watching "bloomberg markets: the european open." upfirst trade coming shortly. i am guy johnson in london. this tuesday morning, the final countdown. polls tighten ahead of britain's general election. also, welcome to the jungle. apple takes on amazon as it launches the home pod. is this innovation?


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